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What is FOUNDER’S AGREEMENT?

A Founders’ Agreement is an official contract that is signed between all the co-founders of a firm. This document states all the responsibilities, ownership, and initial investments made by each of the founders of the company. It is advised to make a founders’ agreement at the incorporation stage of an enterprise as it will lay out the responsibilities and roles of each of the co-founders.

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FAQ

The purpose of the agreement is to make the understanding the co-founders have regarding the functioning of their company and relationship and obligation between co-founders legally binding through a formally written agreement.

It provides for business definition, percentage or number of shares which is held by each co-founder, the extent of each founder responsibility, issue regarding the firing of any founder, a non-compete clause, confidentiality, etc.